Plan to apply federal procurement rules opposed

Finance officials are opposing a proposal from the Legislature requiring federal procurement regulations on local projects partly funded by Washington as they denied criticisms CNMI procurement process is so long and tedious that it risks losing the financial grants.

Herman S. Sablan, director of the Procurement and Supply division of the Department of Finance, said the application of federal procurement laws to Commonwealth projects proposed under two pending measures is “unnecessary and impractical.”

Senate Bills 11-91 and 11-92 seek to substitute the current CNMI procurement rules and regulations with that of the US procurement regulations in cases where the majority of funds used for capital projects as well as architectural and engineering design come from the federal government.

Sablan called on legislators for a comprehensive review of the local procurement laws instead of amending them to apply federal regulations on any project that is using federal money.

The finance department is looking at expanding the types of contracts the government can enter into under existing regulations, particularly in areas better suited with a specific plan like highway projects that rely heavily on federal funds.

“This is the route we would recommend be followed rather than attempting to apply federal procurement rules in the CNMI,” Sablan said.

Sponsored by Senate President Paul A. Manglona, the measures passed the upper house on final reading last December, but are now under review by the House Federal and Foreign Relations Committee.

In simplifying the current law on procurement, the proposal provides compliance of the federal procurement regulations alone as the minimum requirement in using federal funds for various Capital Improvement Projects.

These bills were proposed to ensure that the CNMI does not lose the federal funds unless obligated or spent within a certain period.

Furthermore, legislators found out that both the CNMI and federal procurement regulations have always been required by the authorities in spending federal disaster relief money.

According to Sablan, his office is not aware of any federally-funded projects where the commonwealth government is required to follow federal procurement laws as a condition for the release of the money.

He also defended the CNMI procurement process from charges that it has been “time consuming,” it ends up losing the funds.

“There is no magic in the federal regulations that makes them inherently better or faster than our (rules),” Sablan explained in a letter to committee chair Rep. Melvin Faisao.

In cases where the delay occurs and the funds are lost, he said this may “lie elsewhere with the various individuals whose responsibility it is to get projects moving rather than with the CNMI procurement rules.”

Sablan added that a “timely and informed use of our (procurement regulations) can achieve our goals without the need to look elsewhere.”

The Commonwealth Ports Authority has already asked that they be exempted from the proposal in an earlier letter submitted to Faisao. The House panel is soliciting comments from various agencies and departments before they vote on the bills.